You are the Chief Information Officer of a manufacturing concern of low-cost commodity products based in Philadelphia, Pennsylvania. Your company has U.S. manufacturing plants in Pennsylvania (unionized workers) and Tennessee and Oklahoma (non-union workers) and sales offices in New York and Los Angeles. Your company faces stiff competition from companies with deep pockets. Your IT department provides support for all of these operations.

Your company has three key strategies:

⦁ As a manufacturer and seller of commodity products, your company exercises tight cost controls over its operations in order to maximize its profitability.
⦁ While the products sold by your company are commodity products, your company emphasizes the quality of its products as a means for differentiation other than price.
⦁ Your sales systems are critical to making the customer’s experience of ordering your products superior over that of your competitors.

Your company has announced that it is entering into an agreement by which they are evaluating another company for a potential acquisition. It is a manufacturing firm that produces products that are very different from those currently fabricated by your company. It is headquartered in Denver, Colorado and has manufacturing operations in Texas and Mexico. The products manufactured by this firm are highly specialized and represent a strategic shift on the part of your company to begin moving away from the commodity markets. Because of the strategic significance of this acquisition, your company president has asked you, personally, to participate in the due diligence exercise to evaluate the target’s IT environment.

Questions to be answered:

⦁ Other than the basics of gathering asset lists, organization charts, personnel records, etc., what additional information would you concentrate on collecting? How would this information prove potentially beneficial when updating your IT strategies to encompass this acquisition firm? What could you possibly uncover that may impact your company’s acquisition decision or at least the terms they are willing to offer. What information do you need from your company’s executive management concerning their rationale for the acquisition in order to ensure you collect all of the information necessary to provide a complete report on your findings?

⦁ What would be your primary concerns about this acquisition from an IT perspective? What would be the potential major risks that would require the development of contingency plans?